N-CSRS 1 d174918dncsrs.htm PRUDENTIAL INVESTMENT PORTFOLIOS 8 Prudential Investment Portfolios 8

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

 

Investment Company Act file number:    811-06677
Exact name of registrant as specified in charter:    Prudential Investment Portfolios 8
Address of principal executive offices:   

655 Broad Street, 17th Floor

Newark, New Jersey 07102

Name and address of agent for service:   

Deborah A. Docs

655 Broad Street, 17th Floor

Newark, New Jersey 07102

Registrant’s telephone number, including area code:    800-225-1852
Date of fiscal year end:    9/30/2016
Date of reporting period:    3/31/2016


Item 1 – Reports to Stockholders


PRUDENTIAL INVESTMENTS, A PGIM BUSINESS  |  MUTUAL FUNDS

 

     Prudential QMA Stock Index Fund

 

 

SEMIANNUAL REPORT   MARCH 31, 2016

 

LOGO

 

To enroll in e-delivery, go to

prudentialfunds.com/edelivery

 

  LOGO


Objective: Provide investment results that correspond to the price and yield
performance of the S&P 500 Index

 

 

 

 

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

 

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

 

The accompanying financial statements as of March 31, 2016, were not audited and, accordingly, no auditor’s opinion is expressed on them.

 

Mutual funds are distributed by Prudential Investment Management Services LLC, a Prudential Financial company and member SIPC. QMA is the primary business name for Quantitative Management Associates LLC, a wholly owned subsidiary of PGIM, Inc. (PGIM) a Prudential Financial Company. ©2016 Prudential Financial, Inc. and its related entities. The Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

 

2   Visit our website at prudentialfunds.com


Letter from the President

 

LOGO

 

Dear Shareholder:

 

We hope you find the semiannual report for the Prudential QMA Stock Index Fund informative and useful. The report covers performance for the six-month period that ended March 31, 2016.

 

Since market conditions change over time, we believe it is important to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.

 

Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

 

Prudential Investments® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.

 

Thank you for choosing the Prudential Investments family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

Prudential QMA Stock Index Fund

May 16, 2016

 

Prudential QMA Stock Index Fund     3   


Your Fund’s Performance (unaudited)

 

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852.

 

Cumulative Total Returns (Without Sales Charges) as of 3/31/16
  Six Months (%)    One Year (%)    Five Years (%)    Ten Years (%)
Class A   8.24    1.35    68.73    88.12
Class C   7.89    0.69    63.54    75.60
Class I   8.42    1.67    71.62    94.72
Class Z   8.38    1.63    71.15    93.61
S&P 500 Index   8.47    1.78    72.83    96.77
Lipper S&P 500 Index Objective Funds Average   8.08    1.25    68.20    87.60
          
Average Annual Total Returns (With Sales Charges) as of 3/31/16
     One Year (%)    Five Years (%)    Ten Years (%)
Class A      –1.94    10.30    6.17
Class C      –0.29    10.34    5.79
Class I        1.67    11.41    6.89
Class Z        1.63    11.35    6.83
S&P 500 Index        1.78    11.56    7.00
Lipper S&P 500 Index Objective Funds Average          1.25    10.96    6.49

 

Source: Prudential Investments LLC and Lipper Inc.

 

4   Visit our website at prudentialfunds.com


The returns in the tables do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or following the redemption of Fund shares. The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

 

     Class A   Class C   Class I   Class Z
Maximum initial sales charge   3.25% of the public offering price   None   None   None
Contingent Deferred Sales Charge (CDSC)
(as a percentage of the lower of original purchase price or sale proceeds)
  1% on sales of $1 million or more made within 12 months of purchase   1% on sales made within 12 months of purchase   None   None
Annual distribution and service (12b-1) fees (shown as a percentage of average daily net assets)   .30%   1%   None   None

 

Benchmark Definitions

 

S&P 500 Index—The Standard & Poor’s 500 Composite Stock Price Index (the Index) is an unmanaged index of over 500 stocks of large US public companies. It gives a broad look at how stock prices in the United States have performed.

 

Lipper S&P 500 Index Objective Funds Average—The Lipper S&P 500 Index Objective Funds Average (Lipper Average) is based on the average return of all funds in the Lipper S&P 500 Index Objective Funds Average category for the periods noted. Funds in the Lipper Average are passively managed, limited expense (management fee no higher than 0.50%) funds designed to replicate the performance of the S&P 500 Index on a reinvested basis.

 

Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

 

Prudential QMA Stock Index Fund     5   


Your Fund’s Performance (continued)

 

Six-month performance broken out by S&P 500 Index sectors (width of the bars represents the sectors’ weighting in the overall index).

 

S&P 500 Index as of 3/31/16

 

LOGO

*Sector weightings are subject to change.

 

Source: FactSet.

The S&P 500 Index is a product of S&P Dow Jones Indices LLC (“SPDJI”), and has been licensed for use by Prudential Investments LLC, its affiliates, and subsidiaries. Standard & Poor’s®, S&P® and S&P 500® are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”); Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”); and these trademarks have been licensed for use by SPDJI and sublicensed for certain purposes by Prudential Investments LLC, its affiliates, and subsidiaries. The Prudential QMA Stock Index Fund is not sponsored, endorsed, sold or promoted by SPDJI, Dow Jones, S&P, or their respective affiliates, and none of such parties make any representation regarding the advisability of investing in such product(s) nor do they have any liability for any errors, omissions, or interruptions of the S&P 500 Index.

The performance cited does not represent the performance of the Prudential QMA Stock Index Fund. Past performance does not guarantee future results.

 

6   Visit our website at prudentialfunds.com


Fees and Expenses (unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The example is based on an investment of $1,000 invested on October 1, 2015, at the beginning of the period, and held through the six-month period ended March 31, 2016. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of Prudential Investment funds, including the Fund, that you own. You should consider the additional fees that were charged to your

 

Prudential QMA Stock Index Fund     7   


Fees and Expenses (continued)

 

Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Prudential  QMA Stock
Index Fund
  Beginning  Account
Value
October 1, 2015
    Ending  Account
Value
March 31, 2016
    Annualized
Expense Ratio
Based on the
Six-Month Period
    Expenses  Paid
During the
Six-Month Period*
 
Class A   Actual   $ 1,000.00      $ 1,082.40        0.54   $ 2.81   
  Hypothetical   $ 1,000.00      $ 1,022.30        0.54   $ 2.73   
Class C   Actual   $ 1,000.00      $ 1,078.90        1.18   $ 6.13   
  Hypothetical   $ 1,000.00      $ 1,019.10        1.18   $ 5.96   
Class I   Actual   $ 1,000.00      $ 1,084.20        0.19   $ 0.99   
  Hypothetical   $ 1,000.00      $ 1,024.05        0.19   $ 0.96   
Class Z   Actual   $ 1,000.00      $ 1,083.80        0.25   $ 1.30   
  Hypothetical   $ 1,000.00      $ 1,023.75        0.25   $ 1.26   

 

* Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 183 days in the six-month period ended March 31, 2016, and divided by the 366 days in the Fund’s fiscal year ending September 30, 2016 (to reflect the six-month period). Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

8   Visit our website at prudentialfunds.com


The Fund’s expense ratios for the six-month period ended March 31, 2016, are as follows:

 

Class   Gross Operating Expenses (%)   Net Operating Expenses (%)
A   0.61   0.54
C   1.25   1.18
I   0.26   0.19
Z   0.32   0.25

 

Net operating expenses shown above reflect any fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.

 

Prudential QMA Stock Index Fund     9   


Portfolio of Investments (unaudited)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

LONG-TERM INVESTMENTS    96.9%

     

COMMON STOCKS    96.5%

     

Aerospace & Defense    2.4%

                 

Boeing Co. (The)(a)

     33,984       $ 4,313,929   

General Dynamics Corp.

     15,912         2,090,359   

Honeywell International, Inc.

     41,415         4,640,551   

L-3 Communications Holdings, Inc.

     4,200         497,700   

Lockheed Martin Corp.

     14,156         3,135,554   

Northrop Grumman Corp.

     9,748         1,929,129   

Raytheon Co.

     16,344         2,004,265   

Rockwell Collins, Inc.

     7,363         678,942   

Textron, Inc.

     14,734         537,202   

United Technologies Corp.

     42,340         4,238,234   
     

 

 

 
        24,065,865   

Air Freight & Logistics    0.7%

                 

C.H. Robinson Worldwide, Inc.

     7,700         571,571   

Expeditors International of Washington, Inc.

     9,800         478,338   

FedEx Corp.

     14,316         2,329,499   

United Parcel Service, Inc. (Class B Stock)

     37,400         3,944,578   
     

 

 

 
     7,323,986   

Airlines    0.6%

                 

American Airlines Group, Inc.

     33,200         1,361,532   

Delta Air Lines, Inc.

     42,300         2,059,164   

Southwest Airlines Co.

     34,974         1,566,835   

United Continental Holdings, Inc.*

     20,000         1,197,200   
     

 

 

 
     6,184,731   

Auto Components    0.3%

                 

BorgWarner, Inc.

     11,900         456,960   

Delphi Automotive PLC (United Kingdom)(a)

     15,400         1,155,308   

Goodyear Tire & Rubber Co. (The)

     13,771         454,168   

Johnson Controls, Inc.

     34,556         1,346,647   
     

 

 

 
     3,413,083   

Automobiles    0.6%

                 

Ford Motor Co.

     207,338         2,799,063   

General Motors Co.

     74,600         2,344,678   

Harley-Davidson, Inc.

     9,600         492,768   
     

 

 

 
     5,636,509   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     11   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Banks    5.0%

                 

Bank of America Corp.

     557,395       $ 7,535,980   

BB&T Corp.

     41,358         1,375,981   

Citigroup, Inc.

     159,915         6,676,451   

Citizens Financial Group, Inc.

     26,200         548,890   

Comerica, Inc.

     9,261         350,714   

Fifth Third Bancorp

     39,373         657,135   

Huntington Bancshares, Inc.

     41,929         400,003   

JPMorgan Chase & Co.

     198,693         11,766,600   

KeyCorp

     43,235         477,314   

M&T Bank Corp.

     8,900         987,900   

People’s United Financial, Inc.(a)

     15,000         238,950   

PNC Financial Services Group, Inc. (The)

     27,602         2,334,301   

Regions Financial Corp.

     66,774         524,176   

SunTrust Banks, Inc.

     27,483         991,587   

U.S. Bancorp

     88,395         3,587,953   

Wells Fargo & Co.

     248,816         12,032,742   

Zions Bancorporation

     9,100         220,311   
     

 

 

 
        50,706,988   

Beverages    2.3%

                 

Brown-Forman Corp. (Class B Stock)

     5,730         564,233   

Coca-Cola Co. (The)

     209,064         9,698,479   

Coca-Cola Enterprises, Inc.

     11,200         568,288   

Constellation Brands, Inc. (Class A Stock)

     9,500         1,435,355   

Dr. Pepper Snapple Group, Inc.

     10,400         929,968   

Molson Coors Brewing Co. (Class B Stock)

     9,294         893,897   

Monster Beverage Corp.*

     8,050         1,073,709   

PepsiCo, Inc.

     77,951         7,988,418   
     

 

 

 
     23,152,347   

Biotechnology    3.1%

                 

AbbVie, Inc.

     87,274         4,985,091   

Alexion Pharmaceuticals, Inc.*

     12,000         1,670,640   

Amgen, Inc.

     40,646         6,094,055   

Baxalta, Inc.

     31,574         1,275,590   

Biogen, Inc.*

     12,070         3,142,062   

Celgene Corp.*

     42,400         4,243,816   

Gilead Sciences, Inc.

     75,600         6,944,616   

Regeneron Pharmaceuticals, Inc.*

     4,250         1,531,870   

Vertex Pharmaceuticals, Inc.*

     13,200         1,049,268   
     

 

 

 
     30,937,008   

 

See Notes to Financial Statements.

 

12  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Building Products    0.1%

                 

Allegion PLC

     5,233       $ 333,394   

Masco Corp.

     17,026         535,468   
     

 

 

 
     868,862   

Capital Markets    1.8%

                 

Affiliated Managers Group, Inc.*

     3,000         487,200   

Ameriprise Financial, Inc.

     9,471         890,369   

Bank of New York Mellon Corp. (The)

     58,638         2,159,637   

BlackRock, Inc.

     6,900         2,349,933   

Charles Schwab Corp. (The)

     63,311         1,773,974   

E*TRADE Financial Corp.*

     13,520         331,105   

Franklin Resources, Inc.

     19,742         770,925   

Goldman Sachs Group, Inc. (The)

     21,600         3,390,768   

Invesco Ltd.

     21,100         649,247   

Legg Mason, Inc.

     5,300         183,804   

Morgan Stanley

     82,236         2,056,722   

Northern Trust Corp.

     11,962         779,564   

State Street Corp.

     21,762         1,273,512   

T. Rowe Price Group, Inc.

     13,400         984,364   
     

 

 

 
     18,081,124   

Chemicals    2.0%

                 

Air Products & Chemicals, Inc.

     10,632         1,531,540   

Airgas, Inc.

     3,600         509,904   

CF Industries Holdings, Inc.(a)

     11,900         372,946   

Dow Chemical Co. (The)

     60,236         3,063,603   

E.I. du Pont de Nemours & Co.

     46,944         2,972,494   

Eastman Chemical Co.

     7,886         569,606   

Ecolab, Inc.

     14,282         1,592,729   

FMC Corp.

     7,000         282,590   

International Flavors & Fragrances, Inc.

     4,375         497,744   

LyondellBasell Industries NV (Class A Stock)

     19,300         1,651,694   

Monsanto Co.

     23,784         2,086,808   

Mosaic Co. (The)

     17,100         461,700   

PPG Industries, Inc.

     14,448         1,610,807   

Praxair, Inc.

     15,408         1,763,445   

Sherwin-Williams Co. (The)

     4,316         1,228,636   
     

 

 

 
     20,196,246   

Commercial Services & Supplies    0.4%

                 

ADT Corp. (The)(a)

     8,600         354,836   

Cintas Corp.

     4,800         431,088   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     13   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Commercial Services & Supplies (cont’d)

                 

Pitney Bowes, Inc.

     9,625       $ 207,322   

Republic Services, Inc.

     12,475         594,434   

Stericycle, Inc.*(a)

     4,600         580,474   

Tyco International PLC

     22,000         807,620   

Waste Management, Inc.(a)

     22,413         1,322,367   
     

 

 

 
     4,298,141   

Communications Equipment    1.0%

                 

Cisco Systems, Inc.

     273,244         7,779,257   

F5 Networks, Inc.*

     4,000         423,400   

Harris Corp.

     6,900         537,234   

Juniper Networks, Inc.(a)

     18,600         474,486   

Motorola Solutions, Inc.

     8,916         674,941   
     

 

 

 
     9,889,318   

Construction & Engineering    0.1%

                 

Fluor Corp.(a)

     6,974         374,504   

Jacobs Engineering Group, Inc.*

     6,700         291,785   

Quanta Services, Inc.*

     9,900         223,344   
     

 

 

 
     889,633   

Construction Materials    0.1%

                 

Martin Marietta Materials, Inc.

     3,500         558,285   

Vulcan Materials Co.

     7,500         791,775   
     

 

 

 
     1,350,060   

Consumer Finance    0.7%

                 

American Express Co.

     44,959         2,760,483   

Capital One Financial Corp.

     28,766         1,993,771   

Discover Financial Services(a)

     23,018         1,172,077   

Navient Corp.

     18,792         224,940   

Synchrony Financial*

     44,365         1,271,501   
     

 

 

 
     7,422,772   

Containers & Packaging    0.3%

                 

Avery Dennison Corp.

     4,768         343,821   

Ball Corp.

     7,264         517,851   

International Paper Co.

     21,584         885,807   

Owens-Illinois, Inc.*

     8,200         130,872   

Sealed Air Corp.

     9,736         467,425   

WestRock Co.

     13,933         543,805   
     

 

 

 
     2,889,581   

 

See Notes to Financial Statements.

 

14  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Distributors    0.1%

                 

Genuine Parts Co.(a)

     8,199       $ 814,653   

Diversified Consumer Services

                 

H&R Block, Inc.(a)

     12,520         330,778   

Diversified Financial Services    2.1%

                 

Berkshire Hathaway, Inc. (Class B Stock)*

     101,000         14,329,880   

CME Group, Inc.

     18,100         1,738,505   

Intercontinental Exchange, Inc.

     6,488         1,525,588   

Leucadia National Corp.

     15,900         257,103   

McGraw Hill Financial, Inc.

     14,700         1,455,006   

Moody’s Corp.

     9,376         905,347   

Nasdaq, Inc.

     5,900         391,642   
     

 

 

 
     20,603,071   

Diversified Telecommunication Services    2.7%

                 

AT&T, Inc.

     331,793         12,996,332   

CenturyLink, Inc.

     28,208         901,528   

Frontier Communications Corp.

     55,060         307,785   

Level 3 Communications, Inc.*

     15,500         819,175   

Verizon Communications, Inc.

     219,733         11,883,160   
     

 

 

 
     26,907,980   

Electric Utilities    1.9%

                 

American Electric Power Co., Inc.

     26,391         1,752,362   

Duke Energy Corp.

     37,039         2,988,307   

Edison International

     17,362         1,248,154   

Entergy Corp.

     9,615         762,277   

Eversource Energy

     17,300         1,009,282   

Exelon Corp.

     48,912         1,753,984   

FirstEnergy Corp.

     22,077         794,110   

NextEra Energy, Inc.

     24,772         2,931,518   

Pinnacle West Capital Corp.

     5,700         427,899   

PPL Corp.

     35,652         1,357,272   

Southern Co. (The)

     49,015         2,535,546   

Xcel Energy, Inc.

     27,183         1,136,793   
     

 

 

 
     18,697,504   

Electrical Equipment    0.5%

                 

AMETEK, Inc.

     12,800         639,744   

Eaton Corp. PLC

     25,193         1,576,074   

Emerson Electric Co.(a)

     35,050         1,906,019   

Rockwell Automation, Inc.(a)

     7,263         826,166   
     

 

 

 
     4,948,003   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     15   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Electronic Equipment, Instruments & Components    0.4%

                 

Amphenol Corp. (Class A Stock)

     16,500       $ 954,030   

Corning, Inc.

     60,897         1,272,138   

FLIR Systems, Inc.

     6,300         207,585   

TE Connectivity Ltd. (Switzerland)

     20,300         1,256,976   
     

 

 

 
     3,690,729   

Energy Equipment & Services    1.0%

                 

Baker Hughes, Inc.

     23,245         1,018,828   

Cameron International Corp.*

     10,100         677,205   

Diamond Offshore Drilling, Inc.

     2,800         60,844   

FMC Technologies, Inc.*

     12,100         331,056   

Halliburton Co.

     44,722         1,597,470   

Helmerich & Payne, Inc.(a)

     6,100         358,192   

National Oilwell Varco, Inc.(a)

     19,900         618,890   

Schlumberger Ltd.

     67,541         4,981,149   

Transocean Ltd.(a)

     17,000         155,380   
     

 

 

 
     9,799,014   

Food & Staples Retailing    2.3%

                 

Costco Wholesale Corp.

     23,608         3,720,149   

CVS Health Corp.(a)

     59,299         6,151,085   

Kroger Co. (The)

     51,868         1,983,951   

Sysco Corp.

     28,480         1,330,870   

Wal-Mart Stores, Inc.

     85,126         5,830,280   

Walgreens Boots Alliance, Inc.

     46,478         3,915,307   

Whole Foods Market, Inc.

     17,500         544,425   
     

 

 

 
     23,476,067   

Food Products    1.7%

                 

Archer-Daniels-Midland Co.

     31,159         1,131,383   

Campbell Soup Co.

     9,647         615,382   

ConAgra Foods, Inc.

     22,843         1,019,255   

General Mills, Inc.

     31,944         2,023,652   

Hershey Co. (The)(a)

     7,916         728,984   

Hormel Foods Corp.(a)

     15,000         648,600   

J.M. Smucker Co. (The)

     6,700         869,928   

Kellogg Co.

     13,670         1,046,439   

Kraft Heinz Co. (The)

     31,855         2,502,529   

McCormick & Co., Inc.(a)

     6,500         646,620   

Mead Johnson Nutrition Co.

     10,865         923,199   

Mondelez International, Inc. (Class A Stock)

     84,466         3,388,776   

Tyson Foods, Inc. (Class A Stock)

     15,500         1,033,230   
     

 

 

 
     16,577,977   

 

See Notes to Financial Statements.

 

16  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Gas Utilities

                 

AGL Resources, Inc.

     6,830       $ 444,906   

Health Care Equipment & Supplies    2.1%

                 

Abbott Laboratories

     80,174         3,353,679   

Baxter International, Inc.(a)

     28,574         1,173,820   

Becton, Dickinson and Co.

     11,681         1,773,409   

Boston Scientific Corp.*

     72,772         1,368,841   

C.R. Bard, Inc.

     4,312         873,913   

DENTSPLY SIRONA, Inc.

     12,500         770,375   

Edwards Lifesciences Corp.*

     11,600         1,023,236   

Hologic, Inc.*

     4,800         165,600   

Intuitive Surgical, Inc.*

     2,050         1,232,153   

Medtronic PLC

     75,815         5,686,125   

St. Jude Medical, Inc.

     15,164         834,020   

Stryker Corp.

     17,000         1,823,930   

Varian Medical Systems, Inc.*

     5,200         416,104   

Zimmer Biomet Holdings, Inc.

     9,511         1,014,158   
     

 

 

 
     21,509,363   

Health Care Providers & Services    2.6%

                 

Aetna, Inc.

     19,144         2,150,828   

AmerisourceBergen Corp.

     10,500         908,775   

Anthem, Inc.

     14,200         1,973,658   

Cardinal Health, Inc.

     17,973         1,472,887   

Centene Corp.*

     3,200         197,024   

Cigna Corp.

     13,891         1,906,401   

DaVita HealthCare Partners, Inc.*

     9,200         675,096   

Express Scripts Holding Co.*(a)

     36,370         2,498,255   

HCA Holdings, Inc.*

     17,100         1,334,655   

Henry Schein, Inc.*(a)

     4,700         811,361   

Humana, Inc.

     8,110         1,483,725   

Laboratory Corp. of America Holdings*

     5,600         655,928   

McKesson Corp.

     12,526         1,969,714   

Patterson Cos., Inc.

     4,400         204,732   

Quest Diagnostics, Inc.

     7,700         550,165   

Tenet Healthcare Corp.*

     5,143         148,787   

UnitedHealth Group, Inc.

     51,248         6,605,867   

Universal Health Services, Inc. (Class B Stock)

     5,000         623,600   
     

 

 

 
     26,171,458   

Health Care Technology    0.1%

                 

Cerner Corp.*

     16,700         884,432   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     17   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Hotels, Restaurants & Leisure    1.9%

                 

Carnival Corp.

     24,900       $ 1,313,973   

Chipotle Mexican Grill, Inc.*(a)

     1,740         819,488   

Darden Restaurants, Inc.

     6,353         421,204   

Marriott International, Inc. (Class A Stock)(a)

     10,470         745,255   

McDonald’s Corp.

     49,830         6,262,634   

Royal Caribbean Cruises Ltd.(a)

     9,100         747,565   

Starbucks Corp.

     80,000         4,776,000   

Starwood Hotels & Resorts Worldwide, Inc.

     9,500         792,585   

Wyndham Worldwide Corp.

     6,651         508,336   

Wynn Resorts Ltd.(a)

     4,600         429,778   

Yum! Brands, Inc.

     22,664         1,855,048   
     

 

 

 
     18,671,866   

Household Durables    0.4%

                 

D.R. Horton, Inc.

     17,700         535,071   

Garmin Ltd.

     6,200         247,752   

Harman International Industries, Inc.(a)

     3,700         329,448   

Leggett & Platt, Inc.

     7,400         358,160   

Lennar Corp. (Class A Stock)(a)

     9,800         473,928   

Mohawk Industries, Inc.*

     3,600         687,240   

Newell Rubbermaid, Inc.(a)

     14,227         630,114   

PulteGroup, Inc.(a)

     16,911         316,405   

Whirlpool Corp.

     4,385         790,791   
     

 

 

 
     4,368,909   

Household Products    1.9%

                 

Church & Dwight Co., Inc.

     6,800         626,824   

Clorox Co. (The)

     6,932         873,848   

Colgate-Palmolive Co.

     48,060         3,395,439   

Kimberly-Clark Corp.

     19,416         2,611,646   

Procter & Gamble Co. (The)

     145,123         11,945,074   
     

 

 

 
     19,452,831   

Independent Power & Renewable Electricity Producers    0.1%

                 

AES Corp.

     34,800         410,640   

NRG Energy, Inc.

     14,800         192,548   
     

 

 

 
     603,188   

Industrial Conglomerates    2.5%

                 

3M Co.

     32,998         5,498,457   

Danaher Corp.

     31,900         3,026,034   

General Electric Co.

     504,907         16,050,993   

Roper Technologies, Inc.

     5,600         1,023,512   
     

 

 

 
     25,598,996   

 

See Notes to Financial Statements.

 

18  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Insurance    2.5%

                 

Aflac, Inc.

     23,000       $ 1,452,220   

Allstate Corp. (The)

     21,208         1,428,783   

American International Group, Inc.

     64,701         3,497,089   

Aon PLC

     14,489         1,513,376   

Assurant, Inc.

     3,900         300,885   

Chubb Ltd.

     24,723         2,945,746   

Cincinnati Financial Corp.

     7,507         490,658   

Hartford Financial Services Group, Inc. (The)

     21,453         988,554   

Lincoln National Corp.

     13,251         519,439   

Loews Corp.

     15,117         578,376   

Marsh & McLennan Cos., Inc.

     27,540         1,674,157   

MetLife, Inc.

     59,200         2,601,248   

Principal Financial Group, Inc.

     14,100         556,245   

Progressive Corp. (The)

     31,516         1,107,472   

Prudential Financial, Inc.(b)

     24,100         1,740,502   

Torchmark Corp.

     6,333         342,995   

Travelers Cos., Inc. (The)

     16,511         1,926,999   

Unum Group

     12,626         390,396   

Willis Towers Watson PLC

     7,400         878,084   

XL Group PLC (Ireland)

     15,900         585,120   
     

 

 

 
     25,518,344   

Internet & Catalog Retail    1.9%

                 

Amazon.com, Inc.*

     20,860         12,383,330   

Expedia, Inc.

     6,000         646,920   

Netflix, Inc.*

     22,900         2,341,067   

Priceline Group, Inc. (The)*

     2,760         3,557,530   

TripAdvisor, Inc.*(a)

     6,300         418,950   
     

 

 

 
     19,347,797   

Internet Software & Services    4.2%

                 

Akamai Technologies, Inc.*

     9,900         550,143   

Alphabet, Inc. (Class A Stock)*

     15,860         12,099,594   

Alphabet, Inc. (Class C Stock)*

     16,072         11,972,836   

eBay, Inc.*

     57,300         1,367,178   

Facebook, Inc. (Class A Stock)*

     123,900         14,136,990   

VeriSign, Inc.*(a)

     5,700         504,678   

Yahoo!, Inc.*

     45,600         1,678,536   
     

 

 

 
     42,309,955   

IT Services    3.6%

                 

Accenture PLC (Class A Stock)

     33,800         3,900,520   

Alliance Data Systems Corp.*

     3,290         723,800   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     19   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

IT Services (cont’d)

                 

Automatic Data Processing, Inc.

     25,078       $ 2,249,748   

Cognizant Technology Solutions Corp. (Class A Stock)*

     32,900         2,062,830   

CSRA, Inc.

     7,251         195,052   

Fidelity National Information Services, Inc.

     14,700         930,657   

Fiserv, Inc.*

     12,300         1,261,734   

International Business Machines Corp.

     48,134         7,289,894   

MasterCard, Inc. (Class A Stock)

     53,000         5,008,500   

Paychex, Inc.

     17,525         946,525   

PayPal Holdings, Inc.*

     59,300         2,288,980   

Teradata Corp.*

     6,800         178,432   

Total System Services, Inc.

     9,071         431,598   

Visa, Inc. (Class A Stock)

     104,020         7,955,450   

Western Union Co. (The)(a)

     25,752         496,756   

Xerox Corp.

     49,400         551,304   
     

 

 

 
     36,471,780   

Leisure Products    0.1%

                 

Hasbro, Inc.

     5,954         476,915   

Mattel, Inc.

     17,013         571,977   
     

 

 

 
     1,048,892   

Life Sciences Tools & Services    0.6%

                 

Agilent Technologies, Inc.

     17,898         713,236   

Illumina, Inc.*

     7,700         1,248,247   

PerkinElmer, Inc.

     6,170         305,168   

Thermo Fisher Scientific, Inc.

     21,402         3,030,309   

Waters Corp.*

     4,500         593,640   
     

 

 

 
     5,890,600   

Machinery    1.2%

                 

Caterpillar, Inc.(a)

     31,356         2,399,988   

Cummins, Inc.

     8,916         980,225   

Deere & Co.

     16,680         1,284,193   

Dover Corp.

     8,462         544,360   

Flowserve Corp.

     6,900         306,429   

Illinois Tool Works, Inc.

     17,636         1,806,632   

Ingersoll-Rand PLC

     13,800         855,738   

PACCAR, Inc.

     18,664         1,020,734   

Parker-Hannifin Corp.

     7,438         826,213   

Pentair PLC (United Kingdom)(a)

     9,946         539,670   

Snap-on, Inc.(a)

     3,242         508,962   

Stanley Black & Decker, Inc.

     8,288         871,981   

Xylem, Inc.

     9,300         380,370   
     

 

 

 
     12,325,495   

 

See Notes to Financial Statements.

 

20  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Media    3.0%

                 

Cablevision Systems Corp. (Class A Stock)

     11,700       $ 386,100   

CBS Corp. (Class B Stock)

     23,376         1,287,784   

Comcast Corp. (Class A Stock)

     131,185         8,012,780   

Discovery Communications, Inc. (Class A Stock)*

     7,400         211,862   

Discovery Communications, Inc. (Class C Stock)*

     12,800         345,600   

Interpublic Group of Cos., Inc. (The)

     21,388         490,854   

News Corp. (Class A Stock)

     19,975         255,081   

News Corp. (Class B Stock)(a)

     2,700         35,775   

Omnicom Group, Inc.

     13,034         1,084,820   

Scripps Networks Interactive, Inc. (Class A Stock)(a)

     5,200         340,600   

TEGNA, Inc.

     11,589         271,878   

Time Warner Cable, Inc.

     15,281         3,126,798   

Time Warner, Inc.

     42,574         3,088,744   

Twenty-First Century Fox, Inc. (Class A Stock)

     61,700         1,720,196   

Twenty-First Century Fox, Inc. (Class B Stock)

     22,900         645,780   

Viacom, Inc. (Class B Stock)

     18,276         754,433   

Walt Disney Co. (The)(a)

     81,413         8,085,125   
     

 

 

 
     30,144,210   

Metals & Mining    0.3%

                 

Alcoa, Inc.(a)

     68,044         651,862   

Freeport-McMoRan, Inc.(a)

     63,592         657,541   

Newmont Mining Corp.

     26,897         714,922   

Nucor Corp.

     16,712         790,478   
     

 

 

 
     2,814,803   

Multiline Retail    0.7%

                 

Dollar General Corp.

     16,000         1,369,600   

Dollar Tree, Inc.*

     12,542         1,034,213   

Kohl’s Corp.(a)

     9,900         461,439   

Macy’s, Inc.

     16,682         735,510   

Nordstrom, Inc.(a)

     7,400         423,354   

Target Corp.

     32,882         2,705,531   
     

 

 

 
     6,729,647   

Multi-Utilities    1.3%

                 

Ameren Corp.

     12,469         624,697   

CenterPoint Energy, Inc.

     22,179         463,985   

CMS Energy Corp.

     14,300         606,892   

Consolidated Edison, Inc.

     15,751         1,206,842   

Dominion Resources, Inc.

     32,004         2,404,141   

DTE Energy Co.

     9,987         905,421   

NiSource, Inc.

     16,900         398,164   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     21   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Multi-Utilities (cont’d)

                 

PG&E Corp.

     26,153       $ 1,561,857   

Public Service Enterprise Group, Inc.

     26,894         1,267,783   

SCANA Corp.

     7,800         547,170   

Sempra Energy

     12,698         1,321,227   

TECO Energy, Inc.

     10,800         297,324   

WEC Energy Group, Inc.

     16,633         999,144   
     

 

 

 
     12,604,647   

Oil, Gas & Consumable Fuels    5.5%

                 

Anadarko Petroleum Corp.

     26,836         1,249,753   

Apache Corp.(a)

     20,348         993,186   

Cabot Oil & Gas Corp.

     22,000         499,620   

Chesapeake Energy Corp.(a)

     26,100         107,532   

Chevron Corp.

     101,792         9,710,957   

Cimarex Energy Co.(a)

     5,300         515,531   

Columbia Pipeline Group, Inc.

     19,200         481,920   

Concho Resources, Inc.*

     6,400         646,656   

ConocoPhillips

     66,357         2,672,196   

Devon Energy Corp.

     26,500         727,160   

EOG Resources, Inc.(a)

     29,500         2,141,110   

EQT Corp.

     8,300         558,258   

Exxon Mobil Corp.

     224,152         18,736,866   

Hess Corp.

     13,934         733,625   

Kinder Morgan, Inc.

     95,980         1,714,203   

Marathon Oil Corp.

     45,478         506,625   

Marathon Petroleum Corp.

     28,278         1,051,376   

Murphy Oil Corp.(a)

     8,600         216,634   

Newfield Exploration Co.*

     10,700         355,775   

Noble Energy, Inc.(a)

     21,900         687,879   

Occidental Petroleum Corp.

     40,776         2,790,302   

ONEOK, Inc.(a)

     11,100         331,446   

Phillips 66

     25,628         2,219,128   

Pioneer Natural Resources Co.

     8,700         1,224,438   

Range Resources Corp.(a)

     8,500         275,230   

Southwestern Energy Co.*(a)

     19,800         159,786   

Spectra Energy Corp.

     35,484         1,085,810   

Tesoro Corp.

     6,800         584,868   

Valero Energy Corp.

     25,800         1,654,812   

Williams Cos., Inc. (The)

     35,592         571,963   
     

 

 

 
     55,204,645   

Personal Products    0.1%

                 

Estee Lauder Cos., Inc. (The) (Class A Stock)

     12,300         1,160,013   

 

See Notes to Financial Statements.

 

22  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Pharmaceuticals    5.3%

                 

Allergan PLC*

     21,195       $ 5,680,896   

Bristol-Myers Squibb Co.

     89,979         5,747,858   

Eli Lilly & Co.

     52,397         3,773,108   

Endo International PLC*

     11,000         309,650   

Johnson & Johnson

     149,119         16,134,676   

Mallinckrodt PLC*

     6,300         386,064   

Merck & Co., Inc.

     149,333         7,901,209   

Mylan NV*(a)

     22,200         1,028,970   

Perrigo Co. PLC(a)

     8,000         1,023,440   

Pfizer, Inc.

     329,923         9,778,918   

Zoetis, Inc.

     24,600         1,090,518   
     

 

 

 
     52,855,307   

Professional Services    0.3%

                 

Dun & Bradstreet Corp. (The)

     1,900         195,852   

Equifax, Inc.

     6,530         746,314   

Nielsen Holdings PLC

     19,000         1,000,540   

Robert Half International, Inc.

     6,900         321,402   

Verisk Analytics, Inc.*

     8,000         639,360   
     

 

 

 
     2,903,468   

Real Estate Investment Trusts (REITs)    2.9%

                 

American Tower Corp.

     23,100         2,364,747   

Apartment Investment & Management Co. (Class A Stock)

     8,180         342,088   

AvalonBay Communities, Inc.

     7,311         1,390,552   

Boston Properties, Inc.

     8,400         1,067,472   

Crown Castle International Corp.

     17,700         1,531,050   

Equinix, Inc.

     3,686         1,218,997   

Equity Residential

     19,600         1,470,588   

Essex Property Trust, Inc.

     3,700         865,282   

Extra Space Storage, Inc.

     6,600         616,836   

Federal Realty Investment Trust

     3,500         546,175   

General Growth Properties, Inc.

     30,300         900,819   

HCP, Inc.

     25,200         821,016   

Host Hotels & Resorts, Inc.

     39,036         651,901   

Iron Mountain, Inc.

     9,805         332,488   

Kimco Realty Corp.

     20,700         595,746   

Macerich Co. (The)

     7,400         586,376   

Prologis, Inc.

     27,637         1,221,003   

Public Storage

     7,900         2,179,057   

Realty Income Corp.

     13,600         850,136   

Simon Property Group, Inc.

     16,689         3,466,138   

SL Green Realty Corp.

     5,400         523,152   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     23   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Real Estate Investment Trusts (REITs) (cont’d)

                 

UDR, Inc.

     13,700       $ 527,861   

Ventas, Inc.

     17,933         1,129,062   

Vornado Realty Trust(a)

     9,984         942,789   

Welltower, Inc.

     19,000         1,317,460   

Weyerhaeuser Co.

     41,339         1,280,682   
     

 

 

 
     28,739,473   

Real Estate Management & Development

                 

CBRE Group, Inc. (Class A Stock)*

     14,600         420,772   

Road & Rail    0.7%

                 

CSX Corp.

     51,718         1,331,738   

JB Hunt Transport Services, Inc.

     4,900         412,776   

Kansas City Southern

     6,000         512,700   

Norfolk Southern Corp.

     15,911         1,324,591   

Ryder System, Inc.

     2,821         182,744   

Union Pacific Corp.

     45,716         3,636,708   
     

 

 

 
     7,401,257   

Semiconductors & Semiconductor Equipment    2.7%

                 

Analog Devices, Inc.

     16,500         976,635   

Applied Materials, Inc.

     59,688         1,264,192   

Broadcom Ltd.

     21,029         3,248,980   

First Solar, Inc.*

     3,800         260,186   

Intel Corp.

     255,188         8,255,332   

KLA-Tencor Corp.

     8,220         598,498   

Lam Research Corp.(a)

     8,362         690,701   

Linear Technology Corp.

     12,700         565,912   

Microchip Technology, Inc.(a)

     10,700         515,740   

Micron Technology, Inc.*

     55,616         582,300   

NVIDIA Corp.(a)

     26,800         954,884   

Qorvo, Inc.*(a)

     7,571         381,654   

QUALCOMM, Inc.

     80,500         4,116,770   

Skyworks Solutions, Inc.(a)

     10,300         802,370   

Texas Instruments, Inc.

     54,452         3,126,634   

Xilinx, Inc.

     13,500         640,305   
     

 

 

 
     26,981,093   

Software    4.2%

                 

Activision Blizzard, Inc.

     27,100         917,064   

Adobe Systems, Inc.*

     27,040         2,536,352   

Autodesk, Inc.*

     12,120         706,717   

CA, Inc.

     16,458         506,742   

 

See Notes to Financial Statements.

 

24  


Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Software (cont’d)

                 

Citrix Systems, Inc.*

     8,600       $ 675,788   

Electronic Arts, Inc.*

     16,500         1,090,815   

Intuit, Inc.

     14,200         1,476,942   

Microsoft Corp.

     429,012         23,694,333   

Oracle Corp.

     171,240         7,005,428   

Red Hat, Inc.*

     9,700         722,747   

salesforce.com, inc.*

     33,600         2,480,688   

Symantec Corp.

     35,817         658,317   
     

 

 

 
     42,471,933   

Specialty Retail    2.6%

                 

Advance Auto Parts, Inc.

     4,050         649,377   

AutoNation, Inc.*(a)

     3,923         183,126   

AutoZone, Inc.*(a)

     1,710         1,362,340   

Bed Bath & Beyond, Inc.*(a)

     9,000         446,760   

Best Buy Co., Inc.

     14,300         463,892   

CarMax, Inc.*(a)

     10,400         531,440   

GameStop Corp. (Class A Stock)(a)

     5,600         177,688   

Gap, Inc. (The)

     12,013         353,182   

Home Depot, Inc. (The)

     68,384         9,124,477   

L. Brands, Inc.

     13,522         1,187,367   

Lowe’s Cos., Inc.

     49,396         3,741,747   

O’Reilly Automotive, Inc.*

     5,400         1,477,764   

Ross Stores, Inc.

     21,400         1,239,060   

Signet Jewelers Ltd.

     4,200         520,926   

Staples, Inc.

     32,925         363,163   

Tiffany & Co.

     6,000         440,280   

TJX Cos., Inc. (The)

     36,164         2,833,449   

Tractor Supply Co.

     7,500         678,450   

Urban Outfitters, Inc.*

     4,500         148,905   
     

 

 

 
     25,923,393   

Technology Hardware, Storage & Peripherals    4.1%

                 

Apple, Inc.

     300,038         32,701,142   

EMC Corp.

     103,104         2,747,721   

Hewlett Packard Enterprise Co.

     96,202         1,705,661   

HP, Inc.

     96,202         1,185,209   

NetApp, Inc.

     15,600         425,724   

SanDisk Corp.

     11,000         836,880   

Seagate Technology PLC(a)

     16,000         551,200   

Western Digital Corp.

     12,400         585,776   
     

 

 

 
     40,739,313   

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     25   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

Description    Shares      Value (Note 1)  

COMMON STOCKS (Continued)

     

Textiles, Apparel & Luxury Goods    0.9%

  

        

Coach, Inc.

     14,300       $ 573,287   

Hanesbrands, Inc.

     20,400         578,136   

Michael Kors Holdings Ltd.*

     9,800         558,208   

NIKE, Inc. (Class B Stock)

     72,504         4,456,821   

PVH Corp.

     4,600         455,676   

Ralph Lauren Corp.

     3,300         317,658   

Under Armour, Inc. (Class A Stock)*(a)

     9,600         814,368   

VF Corp.

     17,936         1,161,535   
     

 

 

 
     8,915,689   

Tobacco    1.7%

                 

Altria Group, Inc.

     105,379         6,603,048   

Philip Morris International, Inc.

     83,379         8,180,314   

Reynolds American, Inc.

     44,532         2,240,405   
     

 

 

 
     17,023,767   

Trading Companies & Distributors    0.2%

                 

Fastenal Co.(a)

     15,700         769,300   

United Rentals, Inc.*(a)

     5,400         335,826   

W.W. Grainger, Inc.(a)

     3,274         764,250   
     

 

 

 
     1,869,376   

Water Utilities    0.1%

                 

American Water Works Co., Inc.(a)

     9,400         647,942   
     

 

 

 

TOTAL COMMON STOCKS
(cost $359,927,104)

        969,321,590   
     

 

 

 

EXCHANGE TRADED FUND    0.4%

     

Exchange Traded Fund

                 

iShares Core S&P 500 ETF
(cost $4,618,772)

     22,400         4,628,960   
     

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $364,545,876)

        973,950,550   
     

 

 

 

SHORT-TERM INVESTMENTS    9.1%

  

AFFILIATED MUTUAL FUND    8.9%

  

Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund
(cost $89,047,348; includes $58,826,302 of cash collateral for securities on loan)(Note 3)(c)(d)

     89,047,348         89,047,348   
     

 

 

 

 

See Notes to Financial Statements.

 

26  


     Principal
Amount(000)#
     Value (Note 1)  

SHORT-TERM INVESTMENTS (Continued)

     

U.S. TREASURY OBLIGATION    0.2%

     

U.S. Treasury Bills, 0.214%, 06/16/16
(cost $2,198,723)(e)(f)

     2,200       $ 2,199,116   
     

 

 

 

TOTAL SHORT-TERM INVESTMENTS
(cost $91,246,071)

        91,246,464   
     

 

 

 

TOTAL INVESTMENTS    106.0%
(cost $455,791,947) (Note 5)

        1,065,197,014   

Liabilities in excess of other assets(g)    (6.0)%

        (60,545,534
     

 

 

 

NET ASSETS    100.0%

      $ 1,004,651,480   
     

 

 

 

 

The following abbreviations are used in the semiannual report:

ETF—Exchange Traded Fund

OTC—Over-the-counter

* Non-income producing security.
# Principal amount shown in U.S. dollars unless otherwise stated.
(a) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $57,467,268; cash collateral of $58,826,302 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments. Securities on loan are subject to contractual netting arrangements.
(b) An affiliated security.
(c) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.
(d) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Ultra Short Bond Fund.
(e) Rate quoted represents yield-to-maturity as of purchase date.
(f) Represents security, or a portion thereof, segregated as collateral for futures contracts.
(g) Liabilities in excess of other assets includes net unrealized appreciation (depreciation) on futures contracts as follows:

 

Futures contracts outstanding at March 31, 2016:

 

Number of
Contracts
    Type   Expiration
Date
    Value at
Trade Date
    Value at
March 31,

2016
    Unrealized
Appreciation(1)
 
  Long Positions:        
  112      S&P 500 E-Mini     Jun. 2016      $ 11,258,267      $ 11,488,400      $ 230,133   
  43      S&P 500 Index     Jun. 2016        21,499,529        22,053,625        554,096   
         

 

 

 
          $ 784,229   
         

 

 

 

 

(1) A U.S. Treasury Obligation with a market value of $2,199,116 has been segregated with UBS AG to cover requirements for open contracts at March 31, 2016.

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     27   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

 

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

 

Level 1—quoted prices generally in active markets for identical securities.

 

Level 2—quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates and other observable inputs.

 

Level 3—unobservable inputs for securities valued in accordance with Board approved fair valuation procedures.

 

The following is a summary of the inputs used as of March 31, 2016 in valuing such portfolio securities:

 

        Level 1             Level 2             Level 3      

Investments in Securities

     

Common Stocks

     

Aerospace & Defense

  $ 24,065,865      $   —      $   —   

Air Freight & Logistics

    7,323,986                 

Airlines

    6,184,731                 

Auto Components

    3,413,083                 

Automobiles

    5,636,509                 

Banks

    50,706,988                 

Beverages

    23,152,347                 

Biotechnology

    30,937,008                 

Building Products

    868,862                 

Capital Markets

    18,081,124                 

Chemicals

    20,196,246                 

Commercial Services & Supplies

    4,298,141                 

Communications Equipment

    9,889,318                 

Construction & Engineering

    889,633                 

Construction Materials

    1,350,060                 

Consumer Finance

    7,422,772                 

Containers & Packaging

    2,889,581                 

Distributors

    814,653                 

Diversified Consumer Services

    330,778                 

Diversified Financial Services

    20,603,071                 

Diversified Telecommunication Services

    26,907,980                 

Electric Utilities

    18,697,504                 

Electrical Equipment

    4,948,003                 

Electronic Equipment, Instruments & Components

    3,690,729                 

Energy Equipment & Services

    9,799,014                 

Food & Staples Retailing

    23,476,067                 

Food Products

    16,577,977                 

Gas Utilities

    444,906                 

Health Care Equipment & Supplies

    21,509,363                 

 

See Notes to Financial Statements.

 

28  


        Level 1             Level 2             Level 3      

Health Care Providers & Services

  $ 26,171,458      $      $   

Health Care Technology

    884,432                 

Hotels, Restaurants & Leisure

    18,671,866                 

Household Durables

    4,368,909                 

Household Products

    19,452,831                 

Independent Power & Renewable Electricity Producers

    603,188                 

Industrial Conglomerates

    25,598,996                 

Insurance

    25,518,344                 

Internet & Catalog Retail

    19,347,797                 

Internet Software & Services

    42,309,955                 

IT Services

    36,471,780                 

Leisure Products

    1,048,892                 

Life Sciences Tools & Services

    5,890,600                 

Machinery

    12,325,495                 

Media

    30,144,210                 

Metals & Mining

    2,814,803                 

Multiline Retail

    6,729,647                 

Multi-Utilities

    12,604,647                 

Oil, Gas & Consumable Fuels

    55,204,645                 

Personal Products

    1,160,013                 

Pharmaceuticals

    52,855,307                 

Professional Services

    2,903,468                 

Real Estate Investment Trusts (REITs)

    28,739,473                 

Real Estate Management & Development

    420,772                 

Road & Rail

    7,401,257                 

Semiconductors & Semiconductor Equipment

    26,981,093                 

Software

    42,471,933                 

Specialty Retail

    25,923,393                 

Technology Hardware, Storage & Peripherals

    40,739,313                 

Textiles, Apparel & Luxury Goods

    8,915,689                 

Tobacco

    17,023,767                 

Trading Companies & Distributors

    1,869,376                 

Water Utilities

    647,942                 

Exchange Traded Fund

    4,628,960                 

Affiliated Mutual Fund

    89,047,348                 

U.S. Treasury Obligation

           2,199,116          

Other Financial Instruments*

     

Futures Contracts

    784,229                 
 

 

 

   

 

 

   

 

 

 

Total

  $ 1,063,782,127      $ 2,199,116      $   —   
 

 

 

   

 

 

   

 

 

 

 

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and centrally cleared swap contracts, which are recorded at the unrealized appreciation/depreciation on the instrument, and OTC swap contracts which are recorded at fair value.

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     29   


Portfolio of Investments (unaudited) (continued)

as of March 31, 2016

 

 

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of March 31, 2016 were as follows:

 

Affiliated Mutual Fund (including 5.9% of collateral for securities on loan)

    8.9

Oil, Gas & Consumable Fuels

    5.5   

Pharmaceuticals

    5.3   

Banks

    5.0   

Software

    4.2   

Internet Software & Services

    4.2   

Technology Hardware, Storage & Peripherals

    4.1   

IT Services

    3.6   

Biotechnology

    3.1   

Media

    3.0   

Real Estate Investment Trusts (REITs)

    2.9   

Semiconductors & Semiconductor Equipment

    2.7   

Diversified Telecommunication Services

    2.7   

Health Care Providers & Services

    2.6   

Specialty Retail

    2.6   

Industrial Conglomerates

    2.5   

Insurance

    2.5   

Aerospace & Defense

    2.4   

Food & Staples Retailing

    2.3   

Beverages

    2.3   

Health Care Equipment & Supplies

    2.1   

Diversified Financial Services

    2.1   

Chemicals

    2.0   

Household Products

    1.9   

Internet & Catalog Retail

    1.9   

Electric Utilities

    1.9   

Hotels, Restaurants & Leisure

    1.9   

Capital Markets

    1.8   

Tobacco

    1.7   

Food Products

    1.7   

Multi-Utilities

    1.3   

Machinery

    1.2   

Communications Equipment

    1.0   

Energy Equipment & Services

    1.0   

Textiles, Apparel & Luxury Goods

    0.9

Consumer Finance

    0.7   

Road & Rail

    0.7   

Air Freight & Logistics

    0.7   

Multiline Retail

    0.7   

Airlines

    0.6   

Life Sciences Tools & Services

    0.6   

Automobiles

    0.6   

Electrical Equipment

    0.5   

Exchange Traded Fund

    0.4   

Household Durables

    0.4   

Commercial Services & Supplies

    0.4   

Electronic Equipment, Instruments & Components

    0.4   

Auto Components

    0.3   

Professional Services

    0.3   

Containers & Packaging

    0.3   

Metals & Mining

    0.3   

U.S. Treasury Obligation

    0.2   

Trading Companies & Distributors

    0.2   

Construction Materials

    0.1   

Personal Products

    0.1   

Leisure Products

    0.1   

Construction & Engineering

    0.1   

Health Care Technology

    0.1   

Building Products

    0.1   

Distributors

    0.1   

Water Utilities

    0.1   

Independent Power & Renewable Electricity Producers

    0.1   
 

 

 

 
    106.0   

Liabilities in excess of other assets

    (6.0
 

 

 

 
    100.0
 

 

 

 

 

See Notes to Financial Statements.

 

30  


The Fund invested in derivative instruments during the reporting period. The primary type of risk associated with these derivative instruments is equity risk. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the summary below.

 

Fair values of derivative instruments as of March 31, 2016 as presented in the Statement of Assets and Liabilities:

 

Derivatives not accounted for
as hedging instruments,
carried at fair value

  

Asset Derivatives

   

Liability Derivatives

 
  

Balance Sheet
Location

   Fair
Value
   

Balance Sheet
Location

   Fair
Value
 
Equity contracts   

Due from/to broker—variation margin futures

   $ 784,229  

   $   —   
     

 

 

      

 

 

 

 

* Includes cumulative appreciation/depreciation as reported in schedule of open futures. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

 

The effects of derivative instruments on the Statement of Operations for the six months ended March 31, 2016 are as follows:

 

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income

 

Derivatives not accounted for as hedging
instruments, carried at fair value

  Futures  

Equity contracts

  $ 955,147   
 

 

 

 

 

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income

 

Derivatives not accounted for as hedging
instruments, carried at fair value

     Futures  

Equity contracts

     $ 1,310,218   
    

 

 

 

 

For the six months ended March 31, 2016, the Fund’s average value at trade date for futures contracts long positions was $29,844,112.

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     31   


Statement of Assets & Liabilities (unaudited)

as of March 31, 2016

 

Assets

        

Investments at value, including securities on loan of $57,467,268:

  

Unaffiliated investments (cost $365,928,556)

   $ 974,409,164   

Affiliated investments (cost $89,863,391)

     90,787,850   

Receivable for Fund shares sold

     1,863,443   

Dividends receivable

     1,205,444   

Receivable for investments sold

     124,853   

Tax reclaim receivable

     3,313   

Prepaid expenses

     34,499   
  

 

 

 

Total Assets

     1,068,428,566   
  

 

 

 

Liabilities

        

Payable to broker for collateral for securities on loan

     58,826,302   

Payable for Fund shares reacquired

     4,050,462   

Payable for investments purchased

     366,461   

Accrued expenses and other liabilities

     191,155   

Distribution fee payable

     106,572   

Affiliated transfer agent fee payable

     95,293   

Management fee payable

     66,887   

Due to broker—variation margin futures

     60,495   

Payable to custodian

     13,459   
  

 

 

 

Total Liabilities

     63,777,086   
  

 

 

 

Net Assets

   $ 1,004,651,480   
  

 

 

 
          

Net assets were comprised of:

  

Shares of beneficial interest, at par

   $ 23,466   

Paid-in capital in excess of par

     392,079,626   
  

 

 

 
     392,103,092   

Undistributed net investment income

     3,720,164   

Accumulated net realized loss on investment transactions

     (1,361,072

Net unrealized appreciation on investments

     610,189,296   
  

 

 

 

Net assets, March 31, 2016

   $ 1,004,651,480   
  

 

 

 

 

See Notes to Financial Statements.

 

32  


Class A

        

Net asset value and redemption price per share
($224,993,476 ÷ 5,261,949 shares of beneficial interest issued and outstanding)

   $ 42.76   

Maximum sales charge (3.25% of offering price)

     1.44   
  

 

 

 

Maximum offering price to public

   $ 44.20   
  

 

 

 

Class C

        

Net asset value, offering price and redemption price per share

  

($62,538,419 ÷ 1,470,736 shares of beneficial interest issued and outstanding)

   $ 42.52   
  

 

 

 

Class I

        

Net asset value, offering price and redemption price per share

  

($328,158,824 ÷ 7,658,208 shares of beneficial interest issued and outstanding)

   $ 42.85   
  

 

 

 

Class Z

        

Net asset value, offering price and redemption price per share

  

($388,960,761 ÷ 9,074,765 shares of beneficial interest issued and outstanding)

   $ 42.86   
  

 

 

 

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     33   


Statement of Operations (unaudited)

Six Months Ended March 31, 2016

 

Net Investment Income

        

Income

  

Unaffiliated dividend income (net of foreign withholding taxes of $3,017)

   $ 10,826,954   

Affiliated income from securities lending, net

     90,060   

Affiliated dividend income

     84,946   

Interest income

     2,467   
  

 

 

 

Total income

     11,004,427   
  

 

 

 

Expenses

  

Management fee

     731,221   

Distribution fee—Class A

     320,599   

Distribution fee—Class C

     277,478   

Custodian and accounting fees

     65,000   

Transfer agent fee—Class A (including affiliated expense of $98,000)

     129,000   

Transfer agent fee—Class C (including affiliated expense of $3,000)

     15,000   

Transfer agent fee—Class I (including affiliated expense of $111,000)

     111,000   

Transfer agent fee—Class Z (including affiliated expense of $253,000)

     253,000   

Shareholders’ reports

     60,000   

Registration fees

     40,000   

Legal fees and expenses

     14,000   

Trustees’ fees

     13,000   

Audit fee

     12,000   

Insurance expenses

     6,000   

Miscellaneous

     6,561   
  

 

 

 

Total expenses

     2,053,859   

Less: Management fee waiver

     (341,237
  

 

 

 

Net expenses

     1,712,622   
  

 

 

 

Net investment income

     9,291,805   
  

 

 

 

Realized And Unrealized Gain (Loss) On Investments

        

Net realized gain on:

  

Investment transactions

     2,863,608   

Futures transactions

     955,147   
  

 

 

 
     3,818,755   
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments (including affiliated: $(96,159))

     63,028,071   

Futures

     1,310,218   
  

 

 

 
     64,338,289   
  

 

 

 

Net gain on investment transactions

     68,157,044   
  

 

 

 

Net Increase In Net Assets Resulting From Operations

   $ 77,448,849   
  

 

 

 

 

See Notes to Financial Statements.

 

34  


Statement of Changes in Net Assets (unaudited)

 

    

Six Months

Ended

March 31, 2016

    

Year

Ended

September 30, 2015

 

Increase (Decrease) In Net Assets

                 

Operations

     

Net investment income

   $ 9,291,805       $ 16,740,960   

Net realized gain on investment transactions

     3,818,755         18,680,158   

Net change in unrealized appreciation (depreciation) on investments

     64,338,289         (44,644,451
  

 

 

    

 

 

 

Net increase (decrease) in net assets resulting from operations

     77,448,849         (9,223,333
  

 

 

    

 

 

 

Dividends and Distributions (Note 1)

     

Dividends from net investment income

     

Class A

     (4,170,195      (2,772,211

Class C

     (727,160      (336,055

Class I

     (7,329,593      (4,457,273

Class Z

     (8,809,437      (7,305,498
  

 

 

    

 

 

 
     (21,036,385      (14,871,037
  

 

 

    

 

 

 

Distributions from net realized gains

     

Class A

     (3,289,147      (9,526,261

Class C

     (856,266      (1,988,380

Class I

     (4,883,198      (12,540,604

Class Z

     (6,029,955      (21,267,117
  

 

 

    

 

 

 
     (15,058,566      (45,322,362
  

 

 

    

 

 

 

Fund share transactions (Net of share conversions) (Note 6)

     

Net proceeds from shares sold

     120,262,279         305,176,212   

Net asset value of shares issued in reinvestment of dividends and distributions

     35,898,643         59,793,540   

Cost of shares reacquired

     (126,867,064      (278,057,023
  

 

 

    

 

 

 

Net increase in net assets from Fund share transactions

     29,293,858         86,912,729   
  

 

 

    

 

 

 

Total increase

     70,647,756         17,495,997   

Net Assets:

                 

Beginning of period

     934,003,724         916,507,727   
  

 

 

    

 

 

 

End of period(a)

   $ 1,004,651,480       $ 934,003,724   
  

 

 

    

 

 

 

(a) Includes undistributed net investment income of:

   $ 3,720,164       $ 15,464,744   
  

 

 

    

 

 

 

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     35   


Notes to Financial Statements (unaudited)

 

Prudential Investment Portfolios 8 (the “Trust”) is an open-end management investment company, registered under the Investment Company Act of 1940, as amended (“1940 Act”). The Trust was established as a Delaware business trust on May 11, 1992 and currently consists of one fund, which is the Prudential QMA Stock Index Fund (the “Fund”). The Fund’s investment objective is to provide investment results that correspond to the price and yield performance of the Standard & Poor’s 500 Composite Stock Price Index.

 

Note 1. Accounting Policies

 

The Fund follows investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services—Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.

 

Securities Valuation: The Fund holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Trustees (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

 

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.

 

Common and preferred stocks, exchange-traded funds, and derivative instruments, such as futures or options that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange where the security principally trades. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

 

36  


In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and ask prices, or at the last bid price in the absence of an ask price. These securities are classified as Level 2 in the fair value hierarchy.

 

Common and preferred stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy. Such securities are valued using model prices to the extent that the valuation meets the established confidence level for each security. If the confidence level is not met or the vendor does not provide a model price, securities are valued in accordance with exchange-traded common and preferred stocks discussed above.

 

Participatory notes (P-notes) are generally valued based upon the value of a related underlying security that trades actively in the market and are classified as Level 2 in the fair value hierarchy.

 

Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

 

Fixed income securities traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.

 

Bank loans traded in the OTC market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy.

 

OTC derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.

 

Centrally cleared swaps listed or traded on a multilateral or trade facility platform, such as a registered exchange, are generally valued at the daily settlement price determined by the respective exchange. These securities are classified as Level 2 in the fair value hierarchy, as the daily settlement price is not public.

 

Prudential QMA Stock Index Fund     37   


Notes to Financial Statements (continued)

 

 

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.

 

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

 

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on futures transactions.

 

The Fund invested in financial futures contracts in order to maintain exposure to equities and provide portfolio liquidity. With exchange-traded futures contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange-traded futures and guarantees the futures contracts against default.

 

Master Netting Arrangements: The Fund is subject to various Master Agreements, or netting arrangements, with select counterparties. These are agreements which a subadviser may have negotiated and entered into on behalf of the Fund. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. In addition to master netting arrangements, the right to set-off exists when all

 

38  


the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off, and the right of set-off is enforceable by law. During the reporting period, there was no intention to settle on a net basis and all amounts are presented on a gross basis on the Statement of Assets and Liabilities.

 

Financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.

 

Securities Lending: The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities in the form of fees or interest on the investment of any cash received as collateral. The borrower receives all interest and dividend and such payments are passed back to the lender in amounts equivalent thereto. The Fund also continues to recognize any unrealized gain (loss) in the market price of the securities loaned that may occur during the term of the loan.

 

REITs: The Fund invests in real estate investment trusts, (“REITs”), which report information on the source of their distributions annually. Based on current and historical information, a portion of distributions received from REITs during the period is estimated to be dividend income, capital gain or return of capital and recorded accordingly. These estimates are adjusted periodically when the actual sources of distributions is disclosed by the REITs.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized and unrealized gains (losses) from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on an accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management that may differ from actual.

 

Net investment income or loss (other than distribution fees, which are charged directly to the respective class) and unrealized and realized gains (losses) are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.

 

Dividends and Distributions: The Fund expects to pay dividends from net investment income and distributions from net realized capital gains, if any, at least annually. Dividends

 

Prudential QMA Stock Index Fund     39   


Notes to Financial Statements (continued)

 

and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain (loss) and paid-in capital in excess of par, as appropriate.

 

Taxes: For federal income tax purposes, the Fund is treated as a separate taxpaying entity. It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains are recorded, net of reclaimable amounts, at the time the related income is earned.

 

Estimates: The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

Note 2. Agreements

 

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Quantitative Management Associates LLC (“QMA”). The subadvisory agreement provides that QMA will furnish investment advisory services in connection with the management of the Fund. PI pays for the services of QMA, the cost of compensation of officers, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.

 

The management fee paid to PI is accrued daily and payable monthly, at an annual rate of .15% of the Fund’s average daily net assets up to and including $1 billion and .10% of such average daily net assets in excess of $1 billion. The Fund’s manager has agreed to contractually waive a portion of its management fee, so that the effective management fee for the Fund will be .08% of the average daily net assets of Fund through January 31, 2017. The effective management fee rate before any waivers and/or expense reimbursement was .15% of the average daily net assets for the six months ended March 31, 2016. The effective management fee rate, net of waivers and/or expense reimbursement, was .08%.

 

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of the Class A, Class C, Class I and Class Z shares of the Fund. The Fund compensates PIMS for distributing and servicing the Fund’s Class A and Class C shares, pursuant to plans of distribution, (the “Class A and C Plans”),

 

40  


regardless of expenses actually incurred by PIMS. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class I and Class Z shares of the Fund.

 

Pursuant to the Class A and C Plans, the Fund compensates PIMS for distribution-related activities at an annual rate of up to .30% and 1% of the average daily net assets of the Class A and C shares, respectively.

 

PIMS has advised the Fund that it has received $101,178 in front-end sales charges resulting from sales of Class A shares during the six months ended March 31, 2016. From these fees, PIMS paid such sales charges to affiliated broker-dealers which in turn paid commissions to salespersons and incurred other distribution costs.

 

PIMS has advised the Fund that for the six months ended March 31, 2016, it received $2,753 in contingent deferred sales charges imposed upon redemptions by certain Class C shareholders, respectively.

 

PI, PIMS and QMA are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

Note 3. Other Transactions with Affiliates

 

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable. The Fund’s Class I and Class Z shares are subject to a transfer agent fee of .07% and .13% of the average daily net assets of the Class I and Class Z shares, respectively. Classes A and C each compensate PMFS for its services as they are incurred.

 

PGIM, Inc. an indirect, wholly-owned subsidiary of Prudential, is the Funds’ securities lending agent. Net earnings from securities lending are disclosed on the Statement of Operations as “Affiliated income from securities lending, net.” For the six months ended March 31, 2016, PGIM, Inc. has been compensated approximately $12,800 for these services. Effective February 5, 2016, PGIM, Inc. is being paid no compensation for acting as the securities lending agent. In addition, the securities lending agent continues to absorb the transaction costs associated with the securities lending activity. Prior to January 4, 2016, PGIM, Inc. was known as Prudential Investment Management, Inc. (“PIM”).

 

The Fund may enter into certain securities purchase or sale transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that permits purchase and sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Such transactions are subject to ratification by the Board.

 

Prudential QMA Stock Index Fund     41   


Notes to Financial Statements (continued)

 

 

The Fund invests in the Prudential Core Ultra Short Bond Fund, (formerly known as Prudential Core Taxable Money Market Fund), (the “Core Fund”), a portfolio of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as “Affiliated dividend income”.

 

Note 4. Portfolio Securities

 

The cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, for the six months ended March 31, 2016, were $21,222,308 and $25,177,316, respectively.

 

Note 5. Tax Information

 

The United States federal income tax basis of investments and net unrealized appreciation as of March 31, 2016 were as follows:

 

Tax Basis

   $ 464,290,970   
  

 

 

 

Appreciation

     611,899,546   

Depreciation

     (10,993,502 )
  

 

 

 

Net Unrealized Appreciation

   $ 600,906,044   
  

 

 

 

 

The book basis may differ from tax basis due to certain tax related adjustments.

 

Management has analyzed the Fund’s tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal, state and local income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

 

Note 6. Capital

 

The Fund offers Class A, Class C, Class I and Class Z shares. Class A shares are sold with a front-end sales charge of up to 3.25%. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a 1% contingent deferred sales charge (“CDSC”), although they are not subject to an initial sales charge. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Class C shares are sold with a CDSC of 1% during the first year.

 

42  


Class I and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors. The Trust has authorized an unlimited number of shares of beneficial interest at $.001 par value, currently of one series, divided into four classes, designated Class A, Class C, Class I and Class Z. Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of beneficial interest.

 

Transactions in shares of beneficial interest were as follows:

 

Class A

     Shares      Amount  

Six months ended March 31, 2016:

       

Shares sold

       722,785       $ 30,341,744   

Shares issued in reinvestment of dividends and distributions

       174,058         7,341,775   

Shares reacquired

       (519,602      (21,733,504
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       377,241         15,950,015   

Shares reacquired upon conversion into other share class(es)

       (12,009      (513,356
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       365,232       $ 15,436,659   
    

 

 

    

 

 

 

Year ended September 30, 2015:

       

Shares sold

       1,332,858       $ 58,427,777   

Shares issued in reinvestment of dividends and distributions

       276,458         12,089,501   

Shares reacquired

       (1,125,631      (49,410,316
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       483,685         21,106,962   

Shares issued upon conversion from other share class(es)

       282         12,482   

Shares reacquired upon conversion into other share class(es)

       (72,761      (3,203,484
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       411,206       $ 17,915,960   
    

 

 

    

 

 

 

Class C

               

Six months ended March 31, 2016:

       

Shares sold

       335,075       $ 13,986,044   

Shares issued in reinvestment of dividends and distributions

       36,896         1,550,359   

Shares reacquired

       (117,177      (4,911,683
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       254,794         10,624,720   

Shares reacquired upon conversion into other share class(es)

       (3,533      (152,224
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       251,261       $ 10,472,496   
    

 

 

    

 

 

 

Year ended September 30, 2015:

       

Shares sold

       424,910       $ 18,528,978   

Shares issued in reinvestment of dividends and distributions

       51,764         2,255,861   

Shares reacquired

       (144,306      (6,269,481
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       332,368         14,515,358   

Shares reacquired upon conversion into other share class(es)

       (799      (35,348
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       331,569       $ 14,480,010   
    

 

 

    

 

 

 

 

Prudential QMA Stock Index Fund     43   


Notes to Financial Statements (continued)

 

Class I

     Shares      Amount  

Six months ended March 31, 2016:

       

Shares sold

       814,297       $ 34,303,631   

Shares issued in reinvestment of dividends and distributions

       288,870         12,198,976   

Shares reacquired

       (637,721      (26,778,302
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       465,446       $ 19,724,305   
    

 

 

    

 

 

 

Year ended September 30, 2015:

       

Shares sold

       2,535,333       $ 111,065,765   

Shares issued in reinvestment of dividends and distributions

       387,419         16,968,958   

Shares reacquired

       (1,525,326      (67,151,121
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       1,397,426         60,883,602   

Shares issued upon conversion from other share class(es)

       6,201         283,453   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       1,403,627       $ 61,167,055   
    

 

 

    

 

 

 

Class Z

               

Six months ended March 31, 2016:

       

Shares sold

       994,754       $ 41,630,860   

Shares issued in reinvestment of dividends and distributions

       350,557         14,807,533   

Shares reacquired

       (1,753,045      (73,443,575
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (407,734      (17,005,182

Shares issued upon conversion from other share class(es)

       15,461         665,580   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (392,273    $ (16,339,602
    

 

 

    

 

 

 

Year ended September 30, 2015:

       

Shares sold

       2,651,615       $ 117,153,692   

Shares issued in reinvestment of dividends and distributions

       650,062         28,479,220   

Shares reacquired

       (3,533,599      (155,226,105
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (231,922      (9,593,193

Shares issued upon conversion from other share class(es)

       66,977         2,949,084   

Shares reacquired upon conversion into other share class(es)

       (141      (6,187
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (165,086    $ (6,650,296
    

 

 

    

 

 

 

 

Note 7. Borrowings

 

The Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period October 8, 2015 through October 6, 2016. The Funds pay an annualized commitment fee of .11% of the unused portion of the SCA. Prior to October 8, 2015, the Funds had another SCA that provided a commitment of $900 million and the Funds paid an annualized commitment fee of .075% of the unused portion of the SCA. Interest on any borrowings under the SCA is paid at contracted market rates. The Fund’s portion of the commitment fee for the unused amount is accrued daily and paid quarterly.

 

44  


The Fund did not utilize the SCA during the six months ended March 31, 2016.

 

Note 8. New Accounting Pronouncements

 

In May 2015, the FASB issued Accounting Standards Update (“ASU”) No. 2015-07 regarding “Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share”. The amendments in this update are effective for the Fund for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. ASU No. 2015-07 will eliminate the requirement to categorize investments in the fair value hierarchy if their fair value is measured at net asset value (“NAV”) per share (or its equivalent) using the practical expedient in the FASB’s fair value measurement guidance. Management has evaluated the implications of ASU No. 2015-07 and has determined that there is no impact on the financial statement disclosures.

 

In January 2016, the FASB issued ASU No. 2016-01 regarding “Recognition and Measurement of Financial Assets and Financial Liabilities”. The new guidance is intended to enhance the reporting model for financial instruments to provide users of financial statements with more decision-useful information and addresses certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The new standard affects all entities that hold financial assets or owe financial liabilities. The new guidance is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. At this time, management is evaluating the implications of ASU No. 2016-01 and its impact on the financial statements and disclosures has not yet been determined.

 

Prudential QMA Stock Index Fund     45   


Financial Highlights (unaudited)

 

Class A Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2016          2015     2014     2013     2012     2011  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning of Period     $40.91            $43.97        $37.45        $32.09        $25.16        $25.34   
Income (loss) from investment operations:                                                    
Net investment income     .36            .65        .61        .58        .47        .40   
Net realized and unrealized gain (loss) on investment transactions     2.99            (.93     6.47        5.30        6.90        (.20
Total from investment operations     3.35            (.28     7.08        5.88        7.37        .20   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.84         (.63     (.47     (.52     (.44     (.38
Distributions from net realized gains     (.66         (2.15     (.09     -        -        -   
Total dividends and distributions     (1.50         (2.78     (.56     (.52     (.44     (.38
Net asset value, end of period     $42.76            $40.91        $43.97        $37.45        $32.09        $25.16   
Total Return(b):     8.24%            (1.06 )%      19.09%        18.71%        29.60%        .74%   
             
Ratios/Supplemental Data:  
Net assets, end of period (000)     $224,993            $200,334        $197,250        $162,557        $144,851        $118,691   
Average net assets (000)     $213,743            $210,562        $184,199        $153,755        $135,485        $131,565   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .54% (e)          .54%        .53%        .54%        .55%        .55%   
Expenses before waivers and/or expense reimbursement     .61% (e)          .61%        .67%        .76%        .77%        .77%   
Net investment income     1.71% (e)          1.49%        1.47%        1.69%        1.61%        1.43%   
Portfolio turnover rate     2% (f)          6%        4%        3%        4%        5%   

 

(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return includes the effect of expense subsidies. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) Annualized.
(f) Not annualized.

 

See Notes to Financial Statements.

 

46  


Class C Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2016          2015     2014     2013     2012     2011  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning of Period     $40.56            $43.64        $37.18        $31.87        $24.99        $25.18   
Income (loss) from investment operations:                                                    
Net investment income     .23            .37        .35        .36        .29        .23   
Net realized and unrealized gain (loss) on investment and transactions     2.95            (.94     6.45        5.29        6.86        (.19
Total from investment operations     3.18            (.57     6.80        5.65        7.15        .04   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.56         (.36     (.25     (.34     (.27     (.23
Distributions from net realized gains     (.66         (2.15     (.09     -        -        -   
Total dividends and distributions     (1.22         (2.51     (.34     (.34     (.27     (.23
Net asset value, end of period     $42.52            $40.56        $43.64        $37.18        $31.87        $24.99   
Total Return(b):     7.89%            (1.70 )%      18.38%        17.96%        28.78%        .14%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $62,538            $49,462        $38,749        $29,139        $23,924        $20,351   
Average net assets (000)     $55,497            $46,945        $34,419        $25,730        $23,103        $23,884   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or
expense reimbursement
    1.18% (e)          1.19%        1.16%        1.16%        1.17%        1.17%   
Expenses before waivers and/or expense reimbursement     1.25% (e)          1.26%        1.30%        1.38%        1.39%        1.39%   
Net investment income     1.09% (e)          .85%        .84%        1.06%        .99%        .81%   
Portfolio turnover rate     2% (f)          6%        4%        3%        4%        5%   

 

(a) Calculated based on average shares outstanding during the period.
(b) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return includes the effect of expense subsidies. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) Annualized.
(f) Not annualized.

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     47   


Financial Highlights (unaudited) (continued)

 

Class I Shares  
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2016          2015     2014     2013     2012     2011  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning of Period     $41.07            $44.14        $37.57        $32.20        $25.25        $25.43   
Income (loss) from investment operations:                                                    
Net investment income     .43            .81        .75        .70        .55        .50   
Net realized and unrealized gain (loss) on investment and transactions     3.00            (.97     6.51        5.30        6.94        (.21
Total from investment operations     3.43            (.16     7.26        6.00        7.49        .29   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.99         (.76     (.60     (.63     (.54     (.47
Distributions from net realized gains     (.66         (2.15     (.09     -        -        -   
Total dividends and distributions     (1.65         (2.91     (.69     (.63     (.54     (.47
Net asset value, end of year     $42.85            $41.07        $44.14        $37.57        $32.20        $25.25   
Total Return(b):     8.42%            (.77 )%      19.54%        19.09%        30.06%        1.08%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $328,159            $295,412        $255,507        $222,993        $176,040        $331,595   
Average net assets (000)     $316,488            $291,839        $241,829        $193,507        $214,339        $376,719   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .19% (e)          .19%        .19%        .19%        .19%        .19%   
Expenses before waivers and/or expense reimbursement     .26% (e)          .26%        .33%        .41%        .41%        .41%   
Net investment income     2.07% (e)          1.83%        1.81%        2.03%        2.00%        1.79%   
Portfolio turnover rate     2% (f)          6%        4%        3%        4%        5%   

 

(a) Calculated based on average shares outstanding during the period.
(b) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return includes the effect of expense subsidies. Total returns for periods less than one full year are not annualized.
(c) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) Annualized.
(f) Not annualized.

 

See Notes to Financial Statements.

 

48  


Class Z Shares                                               
     Six Months
Ended
March 31,
        Year Ended September 30,  
     2016          2015     2014     2013     2012     2011  
Per Share Operating Performance(a):                                                    
Net Asset Value, Beginning of Period     $41.07            $44.12        $37.57        $32.19        $25.25        $25.42   
Income (loss) from investment operations:                                                    
Net investment income     .42            .78        .73        .68        .56        .48   
Net realized and unrealized gain (loss) on investment transactions     3.00            (.94     6.49        5.31        6.90        (.20
Total from investment operations     3.42            (.16     7.22        5.99        7.46        .28   
Less Dividends and Distributions:                                                    
Dividends from net investment income     (.97         (.74     (.58     (.61     (.52     (.45
Distributions from net realized gains     (.66         (2.15     (.09     -        -        -   
Total dividends and distributions     (1.63         (2.89     (.67     (.61     (.52     (.45
Net asset value, end of period     $42.86            $41.07        $44.12        $37.57        $32.19        $25.25   
Total Return(b):     8.38%            (.78 )%      19.42%        19.06%        29.94%        1.06%   
             
Ratios/Supplemental Data:                                        
Net assets, end of period (000)     $388,961            $388,796        $425,001        $405,721        $382,510        $336,727   
Average net assets (000)     $389,233            $442,546        $424,209        $390,330        $373,819        $381,784   
Ratios to average net assets(c):                                                    
Expenses after waivers and/or expense reimbursement     .25% (e)          .25%        .25%        .25%        .25%        .25%   
Expenses before waivers and/or expense reimbursement     .32% (e)          .32%        .39%        .47%        .47%        .47%   
Net investment income     2.00% (e)          1.78%        1.75%        1.98%        1.91%        1.73%   
Portfolio turnover rate     2% (f)          6%        4%        3%        4%        5%   

 

(a) Calculated based on average shares outstanding during the period.
(b) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions, if any. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total return includes the effect of expense subsidies. Total returns for periods less than one full year are not annualized
(c) Does not include expenses of the underlying portfolio in which the Fund invests.
(e) Annualized.
(f) Not annualized.

 

See Notes to Financial Statements.

 

Prudential QMA Stock Index Fund     49   


n    MAIL   n    TELEPHONE   n    WEBSITE

655 Broad Street

Newark, NJ 07102

 

(800) 225-1852

 

www.prudentialfunds.com

 

PROXY VOTING
The Board of Trustees of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Securities and Exchange Commission’s website.

 

TRUSTEES
Ellen S. Alberding Kevin J. Bannon Scott E. Benjamin Linda W. Bynoe Keith F. Hartstein  Michael S. Hyland  Stuart S. Parker  Richard A. Redeker  Stephen G. Stoneburn Grace C. Torres

 

OFFICERS
Stuart S. Parker, President Scott E. Benjamin, Vice President M. Sadiq Peshimam, Treasurer and Principal Financial and Accounting Officer Raymond A. O’Hara, Chief Legal Officer Deborah A. Docs, Secretary Chad A. Earnst, Chief Compliance Officer Theresa C. Thompson, Deputy Chief Compliance Officer Richard W. Kinville, Anti-Money Laundering Compliance Officer Jonathan D. Shain, Assistant Secretary Claudia DiGiacomo, Assistant Secretary Amanda S. Ryan, Assistant Secretary Andrew R. French, Assistant Secretary Peter Parrella, Assistant Treasurer Lana Lomuti, Assistant Treasurer Linda McMullin, Assistant Treasurer Kelly A. Coyne, Assistant Treasurer

 

MANAGER   Prudential Investments LLC   655 Broad Street
Newark, NJ 07102

 

INVESTMENT SUBADVISER  

Quantitative Management

Associates LLC

 

Gateway Center Two

100 Mulberry Street
Newark, NJ 07102

 

DISTRIBUTOR   Prudential Investment Management Services LLC   655 Broad Street
Newark, NJ 07102

 

CUSTODIAN   The Bank of New York Mellon   One Wall Street
New York, NY 10286

 

TRANSFER AGENT   Prudential Mutual Fund Services LLC  

PO Box 9658

Providence, RI 02940

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM   KPMG LLP  

345 Park Avenue

New York, NY 10154

 

FUND COUNSEL   Willkie Farr & Gallagher LLP  

787 Seventh Avenue

New York, NY 10019

 


An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

 

E-DELIVERY
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

 

SHAREHOLDER COMMUNICATIONS WITH TRUSTEES
Shareholders can communicate directly with the Board of Trustees by writing to the Chair of the Board, Prudential QMA Stock Index Fund, Prudential Investments, Attn: Board of Trustees, 655 Broad Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Trustee by writing to the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO SCHEDULE
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month no sooner than 15 days after the end of the month.

 

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY
FEDERAL GOVERNMENT AGENCY
  MAY LOSE VALUE   ARE NOT A DEPOSIT OF OR GUARANTEED
BY ANY BANK OR ANY BANK AFFILIATE


LOGO

 

 

PRUDENTIAL QMA STOCK INDEX FUND

 

    SHARE CLASS   A   C   I   Z
  NASDAQ   PSIAX   PSICX   PDSIX   PSIFX
  CUSIP   74441F108   74441F306   74441F405   74441F504

 

MF174E2    0291800-00001-00


Item 2 – Code of Ethics – Not required, as this is not an annual filing.

Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.

Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.

Item 9 – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not applicable.

Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.

Item 11 – Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.

Item 12 – Exhibits

 

  (a) (1) Code of Ethics – Not required, as this is not an annual filing.

 

  (2)  Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit   EX-99.CERT.

 

  (3)  Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.

 

  (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Registrant:    Prudential Investment Portfolios 8
By:    /s/ Deborah A. Docs
   Deborah A. Docs
   Secretary
Date:    May 20, 2016

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:    /s/ Stuart S. Parker
   Stuart S. Parker
   President and Principal Executive Officer
Date:                May 20, 2016
By:    /s/ M. Sadiq Peshimam
   M. Sadiq Peshimam
   Treasurer and Principal Financial and Accounting Officer
Date:    May 20, 2016